Nationwide study shows pandemic impact on retirement expectations

Post-retirement life may never look the same post-pandemic.

According to Nationwide’s eighth annual Advisor Authority survey, market turmoil and the soaring cost of living have forced more investors to consider working after their “retirement.” The study showed that more than two-thirds (69%) of non-retired investors may work or may continue working after they retire, and more than two-fifths of these investors (44%) say they’ll have to work to supplement their retirement savings or income out of necessity.

Recent economic uncertainty following the pandemic has two-fifths (40%) of non-retired investors planning to move to a different city or region after retiring, the survey said. The most common incentives for relocating include a lower cost of living (43%) and lower taxes (34%), suggesting these investors’ decisions are more influenced by macroeconomic factors than being close to family.

The shift in sentiment is not being lost on advisors and financial professionals. The study showed 78% of advisors believe their clients will or may continue working after retirement.

It’s worth noting, however, that not all investors view working through retirement as a way to stay financially afloat, as 60% cited “staying physically and mentally active” and 41% aim to “preserve a sense of purpose” in their continued employment.  

“Regardless of the reason, now is the time for advisors and financial professionals to check in with clients who are approaching retirement to make sure they have a plan in place for their next steps, and to work together to ensure their path is one that will lead to a secure and happy retirement,” Rona Guymon, senior vice president of Nationwide Annuity Distribution, said in a statement.

“It’s also a great opportunity to drive a conversation about what life may look like when they reach a point where they are unable to work, which could come sooner than some may expect,” she added.

Elsewhere, the survey revealed that nearly half (49%) of non-retired investors with a financial advisor are “very nervous” about spending down their retirement savings in today’s current market environment, compared to 32% of investors without an advisor.

"Average life expectancy in the United States has risen to 79 years, but most people still retire between the ages of 64 and 67. That could mean a need for 15 years, or more, of retirement income," said David Scranton, CEO of Sound Income Group. "With inflation driving up the cost of living, that retirement fund may get depleted faster. It's no surprise that some investors have considered reentering the workforce to generate more income during retirement. There are ways to achieve the same goal without having to go back to work through investing in income-generating securities."

And as for the products advisors are recommending to mitigate their clients’ fears, annuities (71%) were the top choice, followed by diversification and noncorrelated assets (63%). Advisors are also moving cash to the sidelines for buying opportunities (42%) and relying on hedging strategies (41%) to protect against market risk, the survey said.